Executive Summary

Tivo in Poland

Based on past analysis of the future economic state of Poland a few key indicators helped determine our suggested product selection.

The Gross Domestic Product has consistently been on the rise at a rate of 3.3% as of 2005 Poland’s economy stands to further benefit from entering the European Union in 2004 Women are becoming more prevalent in the workplace Education levels are on the increase with a stronger push for Professional occupations Polish citizens watch a considerable amount of television and many pay for premium channels

Along with other details not as key as the ones mentioned above, the research team has explored the idea of adding a new product genre to Poland, digital video records with Tivo. Basic changes are needed to adapt Tivo for Polish use.

Voltage needs to be changed to 220 volts to accommodate European outlets. Tivo boxes are large in the United States, due to smaller residences (often apartments) the unit needs to be smaller. Tivo programming guides need to have several points of entry, due to the low availability of traditional land line phone service.

The initial marketing campaign will be catered towards innovators with cable only upon initial launch. Product will be catered towards all television users within the first year. Market penetration is based on United States forecasting goals from the original Tivo product launch.

Year 1: 2% of all Television users Year 2: 3% (5% total adoption rate by end of year 2)

Tivo marketing campaign will be based on two core messages.

“Tivo… so simple ANYONE can use it” – to eliminate the fear of new technology and to show the ease of adapting Tivo into current lifestyle

The other marketing campaign will focus on the Tivo benefits. Which include but not limited to:

Keep your programs forever Digital quality picture and sound Multiple points of accessibility to chose Tivo recording Downloadable formats Season Pass

Tivo will be priced based on adjustment comparisons between the United States and Poland. Prices will be based off of original Tivo pricing in the United States.

Free unit with lifetime subscription at $194.25 (USD) $7.75 monthly service fee with no contract Unit box: $74.99 with no contract

DVD unit $199.99 (regardless of contract status)

Marketing Goals would have a strong presence in consumer electronic stores. This would include:

Marketing Field Representatives – educate store employees on Tivo In Store Demonstration stands – “try before you buy” Point of Purchase (POP) materials – pocket cards and literature

Marketing funds will be heavily allocated to Television. Television is a necessary complement product for Tivo. The marketing budget will be:

50% Television Ads 25% Marketing Field Staff 10% POP 5% Newspaper/Radio 5% Miscellaneous

Our target market will be drawn from the strongest television viewing audience, TVN.

16-49 year olds Innovators (initially) Urban population (i.e. Warsaw and other large cities) Above average income Families with children

With a strong marketing push that emphases brand awareness, user friendliness, and competitive advantage of alternatives it is our recommendation that the Tivo product be launched in Poland.

Johnny Schaefer

Leah Burdette

Jamie Harding

Tivo in Poland

Research and Analysis

The focus of this study is to research the idea of adding an entirely new product into Poland. The product in question is Tivo, the original digital video recorder (DVR). Research was conducted through a variety of sources including personal interviews. This research report will briefly discuss a snap shot of Poland and its economy, as well as information about the product Tivo, and the strategy for implementation. The goal of the Tivo product launch will be to show the strong positive attributes over its outdated competition.

Poland is a republic located in central Europe. Recently as of 2004 a member of the European Union, Poland’s economy has been consistently growing at a rate of 3.3%.i Social structures are evolving in Poland as well, with more women entering the workforce. Dual decision making attributes are also being more widely accepted throughout the

region. With a competitive job market at times, the push for higher education is ensuring many Polish citizens a more lucrative career, and a better way of life. There are 38.6 million Polish at the end of 2005, with the average salary (in USD) being approximately $12,700.ii

Since Television is a necessary complement of Tivo. Our exploration begins with the Television market. In Poland electronic consumer spending is booming. There is an estimated 13 million television sets currently in use in Poland. It is estimated that regional television reaches 63% of the population.iii A growing percent of Poles recreational time is now spent watching TV, as currently the average Pole watches around four hours of television per day. This has led to a large demand for a wide variety of channel availability in Poland. This is also largely due to the fact that over half of all households in Poland watch television via cable (around 4 million subscribers) or satellite dish (around 600,000 subscribers). According to Poland.gov, Polish viewers have a real choice when it comes to television as competition is sharp between stations.

Shopping Habits for Poles are somewhat similar to those in the US, as the majority of men and women share shopping responsibilities.iv Indeed, there are a growing number of partnership-based families in Poland, which leads to a growing number of families that share household responsibilities and shopping habits. As the income level and education level increases per household, so does the level of shopping responsibilities shared between both men and women. As for where Poles shop, in recent years, visiting shopping malls has grown to be one of the most popular pastimes. However, despite the dynamic development of big shopping centers, local shops in residential areas remain the most popular. Research found that most Poles shop no more than five minutes away from where they live. v Studies also found that most Poles shop on Fridays and Saturdays at any particular time of day.

Tivo, or any DVR for that matter, would be at the very introductory stage of the product lifecycle for Poland. This product is extremely difficult to find available anywhere. The only competitors that we were able to find were that of Samsung.vi There was a variety of information available about their DVR’s however these products are so new there, it was impossible to find where they were available or how much they were sold for.

Target Market for Tivo in Poland would be the individuals that own the 13 million television sets currently in use in Poland. We would base our target market largely on what TVN, the most popular television station in Poland, bases theirs on. They look for a target demographic group made up of 16-49 year olds, of urban population, with above average income and education.vii TVN proudly announces that their success is based on their innovative entertainment formats, popular shows and the reliable news, which is what a Tivo customer is likely to be looking for in television programming.

The marketing objectives for launching Tivo in Poland would be to create awareness and demand by being the first to provide this type of service. We want to become the iPod of this industry in Poland and we want Poles to instantly equate Tivo as the only reputable choice for DVR’s in their country. The rate plans to be discussed later will also help encourage “long term” commitment to the Tivo product. Market penetration for the product will be comparable to that of the Tivo launch in the United States goals; 2% of all television in the first year, and 3% additional growth in the following year.viii

With the growing number of employed workers in Poland, along with a variety of televisions shows available. Tivo would be considered an asset too many working families.

Polish families currently use VCRs to record television programs similar to those in the United States. The advantages of Tivo are as follows:ix

Record any program available on your television unit at any time Set up “season passes” to ensure that you never miss your program. Season passes allow the Tivo subscriber to program their unit to tape any given program every time it’s on. There is no need to remember to Tivo the product every day or weekly. Tivo will remember to record it for you. Pause live TV at any time. Whether it is checking on food in the oven, or merely taking a bathroom break, you’d never miss a second. Unlike VHS tapes, the qualities of the programs are recorded digitally. The sound and picture quality will be substantially improved. Unlike VCR tapes, you can watch the programs again and again with out continuing picture loss. Weather related elements are also unaffected by Tivo (ex: Hot weather has been known to ruin VHS tapes). The ability to record the program at any point while you’re watching it. Unlike VCRs, you can watch nearly all of a program, and at any time decide to record the entire program. Tivo will store the entire program for you to record or until another program come on. Set up your Tivo recording programs from any P.C. through the Tivo website. You don’t have to be home to record your favorite program. Download your recorded Tivo programs onto a Playstation Portable and IPOD Video. Watch your favorite tivo’ed programs anywhere!

Compatibility will need a few modifications. The voltage in Europe as a whole is different than that of the United States, currently Tivo boxes run of 120 volts for United States outlets. New European Tivo boxes will have to be created with the 220 voltage that is applicable.x Also Tivo units update the program catalog through phone lines, since phone lines are “hit and miss” so to speak in Polandxi, they could perhaps try developing a Tivo unit that could be updated through a wireless cellular connection or through an Internet connection. Although internet usage is considered costly per some, nearly 30% of the populations are on line.xii

Tivo is simple to use. The remote control and program guides are very users friendly. The interface and buttons are very similar to that of a VCR; users coming from a VCR to Tivo will find the process very easy. Users having a first time recording device may have to read the manual or the “help” option which is available through the Tivo programming guide.

Tivo units should be put on display at any major electronic retailer, and ideally anywhere that sells Televisions and VCRs. There should be an in store display available for users to “try before they buy” the unit. This will allow them to see the relative advantage of Tivo right in the store. Despite the expansion of international chains of supermarkets, hypermarkets, and large specialty stores, the retail market in Poland continues to be fragmented. The top ten retail chains in Poland are foreign, and some of them we could consider working with are Macro, Geant Casino, Auchan, Jeronimo Martins, IKEA, Carrefour, HIT, Castorama, OBI, Leclerc and Tesco.xiii According to an interview with Wieslawa Marzena Chalimoniuk, Polish internet usage is minimal because computers are very expensive.xiv This will also eliminates any fears that the unit is too complex to use in their homes. The Tivo box is clearly observable generally being a black or gray unit with the Tivo unit located on the front. Polish families visiting friends with Tivo will be able to spark conversation starters by asking, “What’s that box on top of your TV?” This will allow a word of mouth advertising to continue to increase the product’s awareness.

Tivo units will offer a 30-day trial period. The unit and the service may be canceled and returned anytime within 30 days. This allows the customer to try the product and decide if it is right for them. With so many advantages listed above, we are confident are rate of return will be very low. Tivo subscriptions can be canceled at anytime, although the box is theirs to own after 30 days.

Product packages and the physical box should be very small. Many Polish families and individuals live in apartments where space is limited.xv The box will be sized at approximately 4 inches deep, 6 inches long and 4 inches tall. This will allow the unit to sit comfortably on or near the television unit. The packaging itself will be slightly larger to include the remote control, instruction manual, and applicable cables. The package will be very bright with TIVO! written very clearly on the box. There will be a picture of a Polish family gathered around the television. The slogan on the box will read, “never miss your favorite program…ever and keep it…. forever!” (Appendix 1) On the backside of the product it will list a few of the product benefits mentioned above such as; “The ability to record any program any time, and watch it at your convenience.” “30 day trial” will also be on the front of the package. Although in the example of the product box is written in English, the product will be written in Polish upon product launch. All Tivo services online, programming, and guide will be all available in Polish.

The biggest problem with marketing this product in our country is that brand awareness and recognition is non existent. Many Polish residents will be unfamiliar with the concept of Tivo and exactly what it does. The risk of those fearing the technological complications of the unit can be difficult to overcome. An aggressive television ad campaign should be implemented upon Tivo’s launch. With the slogan “anyone can do it!” Perhaps showing a Baby Tivo’ing a children’s program and the slogan “anyone can do it!” coming at the end. Also the family pet setting up a Tivo program with the same slogan… “Tivo….anyone can do it!”

Also with the 30-day trial we are overcoming the potential for buyer remorse on the product. Also being able to “put the product in your hand” in retail store outlets will give further explanation to the users about the product. An aggressive education program should be implemented to ensure that all retail store employees know all the benefits of the Tivo unit.

We will mainly want to focus on the ones that have cable or dish, which is over six million. There are over 100 channels on polish cable/dish.xvi This means that there can be a demand for Tivo to record the people’s favorite shows. They also offer movie stations and packages like they do in the US through cable. Some popular stations in Poland are TVN, ATNV, ITV, and Telewizja Trwam, TV Polania, and Viva Polaka.xvii We want to aim for the popular ones so everyone can see our product. These are the stations that our customers are going to be recording their favorite shows. Some popular TV shows we may want to put our commercials in are The Mole, and Big Brother Poland.

Specific allocation of marketing funds will be broke down as follows:

50% Television advertising – with so many Poles watching Television, those who watch television more frequently, thus seeing our ads more frequently will be more included to see the Tivo advantage. 25% Marketing Field Staff – these Tivo troops on the ground will ensure that all electronic store employees will become experts on the product, to help eliminate the fear of the new technology.

15% Store Point of Purchase materials (POP) – Fancy in store displays, pocket cards for the store employees, literature for customers, etc. to help promote the “Tivo experience” 5% Radio and Newspaper – To help establish brand name recognition, and consistency of the product being mentioned. Helps great the “buzz” about Tivo. 5% miscellaneous expensive – Tivo booths at fairs or trade shows, special holiday promotion “give-a-ways”, and other small one time expenditures

(appendix 2)

We aim to price this product to Poland as an affordable price for this new technology. We want the “common man” to be able to afford this product, so we cannot make it a prestige item. We want to appeal to the whole 63% of the country who own a television. Cable in Poland costs around $30 USDxviii, so we don’t want to price it as much as the cable they are already paying for, we want to make it quite a bit lower in price and look at is as an add one to your personal home entertainment system. If we compare this to the US average salary of $12,700, we find that is only about 1/3 of what the average salary is in the US. Poland uses a currency called the Zloty, which is 0.312373 of a US dollar. We propose that a lifetime membership in Poland will cost around $194.25, box included. In the US, Tivo sells for $16.95/month with a three-year contract in the United States.xix We suggest we could offer a slight lower price of monthly service for $7.75. We will also sell the individual unit for $74.99 and the DVD unit for $199.99. (appendix 3) We don’t want this product to come close to the $30/month cable fee people in Poland are already paying for fear of lower adoption rate.

The top five populated counties in Poland are Warsaw, Lodz, Krakow, Wroclaw, and Poznan.xx From our interview, we found that the most technical savvy counties are actually the top 3. We want to focus on these counties because of course; they are the larger more populated cities. There are also cable companies that have products very similar to Tivo, such as Dish Networks, Divo. These companies sell their product with their cable services. Since digital recording technology isn’t apparent in Poland, we could sell Tivo the same way. Partnering with a cable company that is already established gives Tivo’s brand more validity, as well as eliminates the risk of a future competitor on the market. With over 4 million cable subscribers in Poland this market is ripe. Originally Direct TV had a partnership with Tivo, until they elected to use their own DVR service.

Based on this strategy we fill that our goals are reasonable and obtainable for a product launch for Tivo in Poland. Poles currently use VCRs so they are familiar with the concept of “taping” programs, and with dual incomes many families have a higher degree of flexible income. In order for the marketing campaign to be successful three elements are required. Conveying the Tivo advantage and showing the value of Tivo over a conventional VCR. Explaining the user friendliness to eliminate fear that Tivo is difficult to operate and use, and finally, pricing it accordingly to show the value in the product.

i Economic Global Prospects: http://iie.com/publications/papers/mussa0405.pdf 2005

ii CIA World Factbook – Poland: http://www.cia.gov/cia/publications/factbook/geos/pl.html 2005

iii CIA World Factbook – Poland: http://www.cia.gov/cia/publications/factbook/geos/pl.html 2005

iv Personal Interview: Wieslawa Marzena Chalimoniuk 3/07/2006

v Polish News: Economy http://www.polishnews.com/text/business_and_economy 2006

vi Samsung Product Guide: http://www.samsung.com/Products/DVRs/StandaloneDVR/index.htm 2006

vii Polish Television: http://www.poland.gov.pl/Televison,in,Poland,518.html 2006

viii Personal Interview conducted with Tivo employee 4/04/2006 (name omitted)

ix Tivo! www.tivo.com/ 2006

x Enjoy Europe- Electricity: http://www.enjoy-europe.com/hte/chap11/electric.htm 2006

xi CIA World Factbook – Poland: http://www.cia.gov/cia/publications/factbook/geos/pl.html 2005

xii International Statistics – Poland http://www.internetworldstats.com/eu/po.htm 2006

xiii Strategis Canada – International: http://strategis.ic.gc.ca/epic/internet/inimr-ri.nsf/en/gr121318e.html 2006

xiv Personal Interview: Wieslawa Marzena Chalimoniuk 3/07/2006

xv Personal Interview: Wieslawa Marzena Chalimoniuk 3/07/2006

xvi International Statistics – Poland http://www.internetworldstats.com/eu/po.htm 2006

xvii Poland’s Television List: http://www.krrit.gov.pl/sprawozdania/spr2006/inf2006.pdf 2006

xviii Personal Interview conducted with Tivo employee 4/04/2006 (name omitted)

xix Tivo – Buy Tivo!: http://www.tivo.com/2.0.C.asp 2006

xx CIA World Factbook – Poland: http://www.cia.gov/cia/publications/factbook/geos/pl.html 2005

40 hour recorderThis unit will run at $74.99 (USD) with no obligation of service.

Users can cancel at anytime.Unit is free with lifetime subscription

40 hour recorder w/ DVD burner$199.99 USD with no contract, cancel at any time.$199.99 with lifetime subscription. Marketed initially at high end innovators.

TIVO UNITS AVAILABLE UPON PRODUCT LAUNCH

$7.75 month svc fee $194.25 lifetime

Appendix 3